Etoys.com Epitomized Everything That Was Wrong About The Dot-Com Boom



The Rise and Fall of Etoys.com.If you want to know everything that was wrong about the "dot-com boom" in the late 1990s, look no further than Etoys.com.

Etoys.com epitomized everything that was wrong about the "dot-com boom".

The company, which was founded in November of 1997, went public just over 14 months later.

That's right - the company, which had been established as a start-up on November 3rd, 1997, was a publicly traded company by January 4th, 1999.

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Etoys.com was losing money hand-over-fist as it tried to take market share from its brick-and-mortar competition, Toys 'R Us.

Back in late 1999, companies were actually PUNISHED for making money.

It was all about growth back in those days, and if you were making money it meant that you weren't spending enough to acquire new customers.

That's how backwards the "dot com era" was.

eToys.com, which would never make money, went public despite having barely any operational history.

"Investors" lapped up shares of the company. Shares of eToys.com would peak at $84/share, given the company a valuation of roughly $8 billion.

This was more than $2 billion more than what their main "competition", Toys R Us, was worth.

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eToys.com was going to revolutionize the toy-buying experience - or so people thought.

The company grew its customer base quickly, though they were incinerating cash to do so.

This is how most dot-com companies operated back in those days, and the markets loved them for it.

The dot-com bubble would burst in the spring of 2000, however, and eToys.com would quickly shrivel up into nothingness.

Suddenly investors didn't want to own the shares of money-burning online toy sellers.

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eToys.com declared bankruptcy on April 1st, 2001.

It was an impressive three plus years for the company - founded in November of 1997, worth $8 billion in January of 1999 and out of business by April 2001.

The company's assets were acquired by KB Toys in March of 2001 for $5 million.

In February of 2009, the eToys.com domain name was acquired by..

Toys 'R Us.

Filed under: General Knowledge

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